Tag: natural gas

The following are a couple of examples of what’s going on in Romania right now.

Romania’s largest petroleum reserves (famous since WWII) were recently sold to OMV (Österreichischen Mineralölverwaltung Aktiengesellschaft).

Petrom, Romania’s state-owned petroleum company, now belongs to OMV, and every time I fill up my car at Petrom, the receipt says OMV Petrom. I talked to someone today who told me OMV sells roughly 4 Billion Euros of Romanian petroleum every year. And they’ve also got a contract to sell Romanian natural gas, of which they move roughly 2 Billion Euros’ worth every year.

That’s about 6 Billion Euros of sales from Romania alone (they have holdings in other countries and their total annual sales are around 23 Billion Euros per year).

Do you know how much Romania makes from these sales of its own natural reserves, per year, according to the contract drawn up by its own government? 100 Million Euros. That’s an incredibly paltry sum compared to the money OMV makes.

Could Romania have made more? Absolutely. Would OMV have paid more for the right to sell Romania’s oil and gas reserves? Absolutely. I think half and half would have been equitable. Did Romania even need to make a deal with OMV? No.

But when the political environment is such that you can pay a few million Euros to a few corrupt politicians and get the contract drafted with much more favorable terms, of course a corporation will take the easier way. Corporations are out to make money, not to watch out for the common good. Governments are supposed to watch out for the common good. In Romania, the government doesn’t do that.

Here’s another case.

You may have heard about a little region in Romania called Rosia Montana. It’s been famous since Roman times (two thousand years ago) for its gold reserves. It still is.

For several years, Rosia Montana Gold Corporation, a gold mining corporation with investors like George Soros, has been trying to get its claws on it. They’ve been promising all sorts of things to the Romanian government and to the local people in Rosia Montana, but they’ve met with unexpected and forceful grassroots resistance against the deal, and rightfully so.

When you look at the facts, the deal they want the Romanian government to sign is this: they get 96% of the finds and Romania gets 4% of the finds.

Someone’s getting thoroughly shafted and I bet it’s Romania itself. The Romanian government is ready to sign on the deal, because they’re thoroughly corrupt and select politicians stand to make millions, but lots of Romanians (and foreigners concerned with the environmental impact of the project) are saying no, so for now, the deal’s hotly debated.

Romania’s own president, Basescu, wants the deal to go through, because the gold found there will supposedly “replenish Romania’s gold reserves”. He’s either a moron or he stands to make a personal fortune if the deal goes through. If there’s “gold in them thar hills”, then for goodness’ sake, get some unemployed Romanian miners in those mines, take 100% (not 4%) of that gold and get it into the state vaults, pronto. What do you need Rosia Montana Gold Corporation for? Say you do need a foreign investor to help you mine the gold? Then make the revenue sharing more equitable! Again, half and half would be the right choice.

Naturally, the Romanian government would disagree, and TV pundits are talking the issue to death on all the news channels. Talk solves nothing. Ever since 1989, Romanian newspapers and independent TV and radio stations have been uncovering corruption after corruption in Romania’s political dealings, and oftentimes, they’ve given clearcut financial proof of the wrongdoings. Have any of the truly guilty gone to jail? No, some of their cronies went to jail, while the real bastards have gotten richer and re-elected. The judicial branch has never been able to convict and send to jail powerful Romanian politicians, in spite of all their corruption, theft of government money, manipulation of government contracts and… the list of crimes goes on and on.

On the other hand, and this is the saddest part, if these contracts with foreign corporations were equitable, do you think all that money would benefit the Romanian people? Do you think it would be used to rebuild Romania’s infrastructure and to spur innovation and small business growth? You’d be a fool to think so. After all, this is Romania, not Sweden, Norway, Iceland or New Zealand. Logic and rational thinking have no place here, nor does equitable behavior. All that extra money, all those gobs and gobs of extra money would likely line the pockets of the same bastards who are screwing the country right now.

I don’t know what’s to be done. Well, I do know, but my solution involves legal superpowers and weapons and I’m pretty sure it’s illegal in the EU and most of the countries in this world…